IT Consulting Tax

Yes, IT consulting services are classified as technical services subject to 2% PPh 23 withholding on the gross fee. The client performs the withholding and provides a withholding slip that the consultant claims as a tax credit. If the IT consultant is an individual taxpayer using the deemed expense method (NPPN), the withholding is reconciled against the final individual income tax return using progressive rates.

Export of IT services — including remote consulting to overseas clients, offshore software development, and cloud-based services delivered to foreign customers — is subject to 0% VAT under PMK-32/2019. Conditions include: the service is delivered outside the customs area, there is a written contract with the foreign client, and payment is received in foreign currency. Required documentation includes the contract, invoice, and foreign exchange receipt evidence.

Yes, IT consulting firms that conduct vocational training, bootcamps, or certification programs for their employees may qualify for the 200% super deduction under PMK-153/2020. The deduction applies to costs incurred for training that improves employee competencies. Requirements include: the training is conducted through an accredited institution or in-house program with structured curriculum, and the firm maintains detailed participant and cost records.

Software resale by IT consultants is treated as goods sales subject to 11% VAT. If the consultant also provides implementation, customization, or training services related to the software, these services may be bundled or separately invoiced with different VAT treatment implications. The input VAT on software license purchases can be credited. The profit margin on software resale is subject to standard corporate income tax at 22%.

Essential records include: all client contracts specifying scope of work and fee structure, timesheets or deliverables supporting revenue recognition, PPh 23 withholding slips from each client, VAT invoices categorized by service type, export service documentation (contract, invoice, forex receipt), employee training records for super deduction claims, and subcontractor agreements with corresponding withholding documentation.

Your tax work is handled by Arunika's tax consultants. We confirm the scope, deadlines and price before work starts.

Contact us early. We help analyze the risk, prepare supporting documents, draft the response, and assist discussions with the tax office.

We review your structure, transactions and available incentives so tax is calculated under the rules, without crossing into tax evasion. The outcome depends on your facts, so we do not promise a savings figure.